Thursday, May 6, 2010

S&P 500 ~ Elliott Wave Count 6 May 2010

A day I'll never forget...

6% down and up within a few minutes...

I actually expected wave 5 to end at 1140 to complete wave (A) of an ABC correction which should end late May (and not today..), so I exited my shorts waaaayyyy to early...) I hope you guys did better.

My target for this correction was 1064.8. This target is based on the fractal I posted a few days ago:

(take the rally in Oct 09 divide it by the sell off to Nov 09. Take the rally form Feb 10 to 1220 and divide it by the number you got before. Then subtract this number from 1220 to get 1064.8 (hope I made no mistake.. :))

I could be totally wrong here and another crash is just around the corner but since the target for this correction was almost reached today I think we will make new highs soon. Yep, new highs.

I'm posting a long term chart today, I actually planned to do it on the weekend but after today's event I do it now:

Primary [A] ended at 1214 (not 1220). Wave [B] unfolded in a expanded flat with a large, a very large actually, wave (C) and within (C) the crash wave [v] of 5 to complete this correction. (This can be counted differently as a simple Zigzag from 1220. I do like it as I have it now though.)

How far Primary [C] will go we can just guess. Either it will be very short and top around 1300 to complete this bear market rally or rally to new all time highs to complete Cycle wave d of an Expanding Triangle which began in 2000, so about the same we got 40 years ago (this is the preferred count).

Alternative long term count is that this rally topped and we began a new downtrend at 1220. Almost anything is possible at the moment I hope the next days will show whether a new bear began or not.

If a new bear began then the short term count could look like that:

He posted this count count just a few minutes before the crash. Congrat Filipe ; )!

Wave (iii) ended at 1066 with the rest of the impulse to come later this month down to 1000. If we make a new low (below 1066) I may discard my bullish option and turn bearish.

But let's see first where this week will end. ; )